Phan v. Pham, 2010 WL 658244 (Cal. App. Ct. Feb. 25, 2010).

Duc Xuan Nguyen, President of the Federation of Associations of the Republic of Vietnam Navy and Merchant Marine sent an e-mail to his fellow veterans accusing plaintiff Huang Tan Phan of having been disciplined by the Navy of the Republic of Vietnam for abusing behavior during the last days of the Vietnam War. Defendant Lang Van Pham received the e-mail and forwarded it with the following introduction: “Everything will come out to the daylight, I invite you and our classmates to read the following comments of Senior Duc (Duc Xuang Nguyen) . . .” The issue before the court was whether the additional comments by defendant were enough to subject him to liability for the defamatory contents of the e-mail he was forwarding.

The court in Barrett v. Rosenthal (2006) 40 Cal. 4th 33, held that simply forwarding a defamatory e-mail was not enough to hold a defendant liable for defamation. The defendant in Barrett, however made “no changes in the article she republished on the newsgroup,” but the court held that at some point “active involvement in the creation of a defamatory Internet posting would expose a defendant to liability as an original source.”

The “material contribution” test articulated by the Ninth Circuit in the case of Fair Housing Council of San Fernando Valley v. Roommates.com, LLC (2008) 521 F.3d 1157 states that a defendant’s own acts must materially contribute to the illegality of a message for immunity to be lost. Applying that test the court held that the defendant in this case made no material contribution to the alleged defamation in the e-mail he received. The defendant merely introduced the contents of an email with the only defamatory content found in the original message. Defendant was therefore immune from liability for defamation under Section 230 of the Communications Decency Act.

In order to decide if a contract is procedurally unconscionable, courts consider factors such as how the contract was entered into, whether the parties had adequate time to read and understand the contract, and whether important terms in the contract are conspicuous. Under the Uniform Commercial Code of many states, a term in a contract is conspicuous if it is presented in a manner “that a reasonable person against which it is to operate ought to have noticed it.” Courts interpreting this definition have looked to see whether the presentation of contract terms include any means to set it, or its heading, apart from the rest of the content displayed, such as difference in color, size, or font.

Here are some simple steps you can follow to ensure that your contract will be seen by your customers and enforced by the court if a problem does arise:

1. Don’t Hide Your Terms

This step should be fairly obvious but too many website operators choose to bury their terms of service either on unrelated pages that customers are unlikely to visit, or at the very bottom of a page in a small font. No matter what size font you use, if your users have to scroll way down a page to view the terms (and they don\’t have to do the same amount of scrolling to make a purchase) chances are you’re running an unnecessary risk

2. Have Plenty of Links

This step is really a continuation of your efforts NOT to hide the terms of a website. If you have multiple pages required to finalize an order, have a link to the terms on each page, and have each link be visible. This doesn’t mean that your website needs to be plastered with links but one visible link per page should suffice without disrupting the look and feel of your site.

3. Use Blue, Underlined Links

This may sound silly, but courts like consistency and precedent and while you may like the look of a yellow hyperlink for your terms in italic, courts are familiar with standard blue, underlined links. Chances are your customers are familiar with blue links as well so make it as easy as possible for them to recognize the links to your terms by showing them the convention they’re used to.

4. Consider a Clickwrap Agreement

Clickwrap agreements require a user to check a box or push a button signifying that they have seen and read the terms before making a sale. Browsewrap on the other hand, assumes that users have read and agreed to terms because they have been conspicuously posted. While both types of agreements will be enforced under the right conditions, if the organization and structure of your site permits a clickwrap agreement it is always best to have an affirmative action that shows a manifestation of intent to enter into an agreement.

For more information about e-commerce and online contracts visit the WLF Lawyers website: http://www.wlflawyers.com.

Most contracts are not required by law to be in writing but a written contract preserves the intent of the parties and makes sure that there is no confusion if a dispute arises in the future. Contracts are a safety net, if everyone was completely trustworthy with a perfect memory they would be useless, but we draft contracts in anticipation of a future problem. Unfortunately, contracts are static but the laws and situations they are based on are not. If you take the time, and money, to have your agreements professionally prepared you should periodically pull them out of the drawer and take care of them so that they can take care of you when you need them.

The following are a few examples of reasons to perform an audit of your legal documents.

1. Technology Policies

Most employment agreements do more than just set the salary of an employee and the number of vacation days allowed. These agreements contain employee policies and workplace procedures that must be followed, and the more complicated and high-profile the position, the more restrictive these agreements are of work, and even some personal, activities.

There was a time when having an e-mail or computer policy seemed ridiculous and overly controlling but today these are commonplace clauses in most employee contracts. Now, more and more companies are adding policies for cell phones and even social networking sites. If your employee policies don’t include the word “Twitter,” chances are they need to be reviewed.

2. “Personal” Online Activities

The Federal Trade Commission (FTC) recently released updated guidelines aimed at protecting consumers from potentially misleading endorsements. Under these new rules, an employer could be liable for statements made on non-employer maintained websites (such as personal blogs, MySpace, Facebook, and Twitter) by employees. Employees are now required to disclose their relationship to an employer when making endorsements even if those endorsements reflect their own thoughts, opinions, and beliefs. A misleading statement by an employee made on one of these social networking sites can expose an employer to expansive liability but I’m guessing most employees won’t consider such activities damaging, or even covered by the terms of their employment.

3. Non-transferability Clauses

When parties come together to form a contract they usually only want to deal with the other party and require that the terms of the contract are nontransferable without their written consent. These types of clauses are generally not argued about and present few problems, that is, until a Court decision in September of 2009. In the case of Cincom Sys, Inc. v. Novelis Corp., the 6th Circuit held that a nontransferable software license was violated when a party to the contract merged with another subsidiary of its parent company, thereby changing its corporate structure.

Because this type of language that prevents transfer or assignment of a contract is so common it is highly recommended that an audit be performed in advance of any mergers or sales.

Conclusion

Most businesses realize that there are certain legal services included in the cost of doing business. My firm deals with many individuals who have recently started a business or are contemplating taking their first steps to a new venture. Too often, however, we encounter people who simply want the minimum work possible to allow them to move on to “more important things” and who have no interest in developing an ongoing relationship with an attorney or law firm. In many cases these individuals turn to form contracts and non-attorney legal providers to give them standardized templates and forms that they try to adapt to suit their needs to save money. While these practices may appear to work at the time you never really know the value of your legal documents, or of a relationship with a good law firm, until you are paying to enforce your rights in court.